Navi Flexi Cap Fund Direct Yearly Reinvestment of Income Distribution cum capital Wdrl Opt INF959L01ED1

Navi Flexi Cap Fund earns a Below Average Process Pillar rating.

The process is bolstered by low costs across its parent firm's funds, whose fees rank in their respective category's second-cheapest quintile on average. The pattern of low expenses at the firm indicates that it is focused on delivering strong results for investors. However, the rating is held back by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period. The parent firm's five-year risk-adjusted success ratio of 11% also holds the process back. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

This strategy, over time, has opted for smaller market-cap companies, compared with others in the Flexi Cap Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this strategy has consistently had a defensive tilt owing to its exposure to high-quality stocks over the past few years. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it endure downturns better than Morningstar Category peers. In recent months, the strategy was more exposed to the Quality factor compared with its Morningstar Category peers as well. This strategy has also been exposed to liquid stocks during these years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. Additionally, the managers have consistently taken on more risk, demonstrated by higher volatility exposure than peers. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in industrials and consumer cyclical relative to the category average by 9.4 and 4.8 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 10.8 and 3.3 percentage points of assets, respectively. The strategy owns 67 securities and its assets are more dispersed than peers in the category. In particular, 29.2% of the portfolio's assets are concentrated in the top 10 fund holdings, compared to the category average's 39.9%.